How a DEA Drug Bust Handed the FCC a Case Against AT&T

When federal drug agents seized nearly $3.4 million worth of drugs, cars, jewelry, gold and computers during an investigation into two Cleveland-area businesses, they uncovered evidence for an unlikely enforcement partner: the Federal Communications Commission.

The US Drug Enforcement Administration found financial documents that showed the companies Discount Directory Inc. and Enhanced Telecommunications Services were defrauding thousands of telephone customers—mostly small businesses—by charging $9 per month for a sham directory assistance service. Meanwhile, AT&T was receiving a fee from the companies for each charge placed on its customers’ bills. AT&T agreed to pay $7.75 million to resolve claims that the company included unauthorized third-party charges on its customers’ bills, a practice known as “cramming.”